Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality?

The Institute released Blue Collar Blues: Is Trade to Blame for Rising US Income Inequality?, a major new study that examines the relationship between trade and US income inequality, on February 7, 2008. Author Robert Z. Lawrence presented his research on this important issue in the current debate over globalization.

Lawrence finds that trade plays a minor role in creating income inequality, which suggests any policy focused narrowly on trade to deal with wage inequality and job loss is likely to be ineffective. He recommends instead that policymakers (a) use the tax system to improve income distribution and (b) implement adjustment policies to deal more generally with worker and community dislocation.